I was thinking about how we're able to trade index option spreads profitably in the current environment of low interest and low inflation. Then I remembered 1980 the year I started work out of college when the inflation rate was 13.58% (http://inflationdata.com/Inflation/Inflation_Rate/HistoricalInflation.aspx). Somehow people were able to buy houses (with 15% mortgages!), buy food, gas etc. My question is: what would happen to strategies like the RTT in a high interest, high inflation regime? What happens to IV, option premiums, stock prices?